More distressed assets in Dubai now than downturn - Tasweek

There are more cut price real estate assets available in Dubai now than during the worst of the downturn in 2009, as developers and owners seeking to offload units accept losses in order to close a sale, a real estate executive claimed.

The emirate's real estate market was one of the worst hit during the downturn in 2008 and 2009, with prices slumping nearly 60 percent and around half of projects stalled or canceled.

During this time, Masood Al Awar, CEO of Tasweek Real Estate Development and Marketing, launched a US$250m fund which sought to snap up distressed assets in Dubai and Abu Dhabi.

Al Awar, famously the first real estate agent to sell a freehold property in Dubai, said it was difficult to find owners and developers willing to sell properties in Dubai at a loss in 2009. He said this is no longer the case and there are more opportunities to find distressed assets on offer at discounted prices.

“Now there is a lot of people and offers that are coming on board… I would have loved to have seen these in 2009,” he said.

“Certain developers are saying ‘we are out, take whatever you want’… They want to protect their reputation. I predicted it from the beginning and it is coming now,” he added.

Al Awar said there was a number of key areas where opportunities exist. “Dubai Marina, partially Dubai Investment Park, partially Jumeirah Lakes Towers… I think we have not examined those opportunities but it is lying on our table right now and we are thinking about it.”

Saudi is also an attractive market for distressed assets, Al Awar added. “We are at the moment trying to establish our contact and in the next two quarters for sure we will confirm our joint venture and start [in Saudi Arabia]. It is a huge market and has an organic market and the real estate components are very attractive."

Looking further afield, Al Awar said Europe was also now a rich market for assets looking for new owners. “[Europe] is two different markets now. In 2009 it was individuals trying to get rid of their assets, now it is more proper developers. It is a different ball game.”

I dare anyone to have a look at the land transactions per month as listed on the DLD (Dubai Land Department Website). Put it on excel, draw a graph and add a trend line. And guess what - it's edging downward. For sure we just came out of summer, and it was Eid as well, but anybody talking about an increase or new boom should check these facts carefully

let's assume there is regain of interest for the RE market in some areas. That remains limited to those areas. The second and main concern for investors. Has anything changed in the way developers behave?, or the fixing of service charges?, are the Homeowners associations able to challenge the developers?, do investors ahve an opportunity to take a developer who is in contract breach to court at an affordable cost and with a straight forward outcome that can be enforced by the law? is it easy to buy sell and manage properties in Dubai? what are the chances that an existing law may change in the coming year? can an owner stay in Dubai without hassle? what about utilities cost? are they reasonable, calculated fairly? can they be challenged in a reasonable way? I think that the answers to the above questions will have an impact on the buying decision for the majority of investors. I don't think that one bird (Swallow) doesn't make it the spring (old farmers saying)

Distressed Fund, where he makes management & peformance fees on assets under management even if he hasn't deployed most of the capital as there are no opportunities!!! He saw it coming is the best part...what a character.

I wanted to say "finally, someone (in real estate) in Dubai with a little sense". But then I read the comments, and started laughing. A lot of the same people trying to hype up the property market, saying the this is the start of another boom, or that they are fully recovered...blah blah blah. I cannot disagree with the comments that the greens and some other establishments may still have high demand, but those are a few small fish in a huge ocean of rotten seafood. I can't imagine how with all the new developments - as well as the ones that have been cancelled or on hold - how were back to pre-crash levels. Dreamers will always dream of reaching another planet, and will probably die hungry, while the realists build a new metropolis in the next "cool place" and become rich....

Posted by: Ian
Thursday, 8 November 2012 11:22 AM[UAE]
- UK

Yes "the next cool place"can you name some? please tell us where to invest? Europe is an excellent place now. How about here in the GCC, where do you recommend? I bought 2 properties in Dubai one in 2009 and one in 2010. sold one in 2012 for a 200,000 dirhams profit. Please let me know where to invest next? What other cities in the GCC do you recommend?